Cryptocurrency Update: Steemit, Factom and $1 Million per Bitcoin

Western Union Speaks on Coinbase Pilot Integration

David Thompson, the CTO of global remittance giant Western Union, took the stage at MoneyConf 2017 in Madrid, Spain to speak about his outlook on digital currency and announced a pilot program with Coinbase.

Western Union’s view is that digital currencies need to be regulated and integrated into the law before they will be included on their platform. Not long ago, they tried a partnership with Ripple, but broad buy-in from other large institutions didn’t materialize.

Still, Mr. Thompson doesn’t doesn’t believe digital currencies will wipe out the remittance business. Instead, a partnership such as this with Coinbase, could be the future. “Customers have been asking us if digital currency is going to wipe out the remittance business,” he said.

Thompson also said Western Union is also investigating how the technology can be leveraged for real-time settlement, integrated smart contracts for import/export transactions and alternative payment types. As a result of this experiment, the Western Union option will become a part of Coinbase’s web app. This project has been in the works for quite some time, but there’s no official launch date as of yet.

Investment Manager Seeks $400 Million for New Cryptocurrency Fund

New filings from the US Securities and Exchange Commission reveal that Mr. Tim Enneking is launching a “Crypto Asset Fund”, according to CNBC. The fund document said the fund plans to be registered in the state of Delaware. Mr. Enneking is reportedly seeking to raise as much as $400m for a new fund.

Recently, another private fund called Polychain Capital launched with much fanfare with the announcement of a $10M from VC heavyweights Andreessen Horowitz And Union Square Ventures.

Of the several fund launches over the past two years, none have gotten as much press as Bitcoin Investment Trust (GBTC) run by Barry Silbert. The GBTC came under scrutiny, due to the price premium of the shares compared to Bitcoin. Even though the fund is setup to track Bitcoin, the fund structure is setup as a trust, which is very different from a private LP hedge-fund structure.

US House Committee will Hold Hearing on Virtual Currency

The US House of Representatives Financial Services Committee held a hearing on virtual currencies this past week to address issues in virtual currency. The hearing was hosted by the Terrorism and Illicit Finance Subcommittee, and was called “Virtual Currency: Financial Innovation and National Security Implications”.

Many politicians have been talking about counter-terrorism measures and recent tragedies have made things ramp up even more. According to reports, current members of Congress plan to turn their attention toward digital currencies, as they relate to terrorism financing.

Vitalik Buterin met with President Putin at SPIEF 2017

cointelegraph.com image

Vitalik Buterin, co-inventor of Ethereum, attended the St. Petersburg International Economic Forum (SPIEF) last week. There, he met with Russian President, Vladimir Putin. The brief meeting coincided with an announcement by the Russian Central Bank saying it wants a national cryptocurrency, according to several news reports. Buterin commented on Reddit about the meeting, but offered no other information about what happened or what was discussed.

There was a message posted on the Russian President’s website regarding the meeting which stated:

“On the sidelines of [SPIEF] Vladimir Putin met with Vitalik Buterin, the founder of one of the world’s largest blockchain platforms, Ethereum. Mr Buterin described the opportunities for using the technologies he developed in Russia. The President supported the idea of establishing ties with possible Russian partners. The conversation was held following the President’s meeting with heads of major foreign companies and business associations.”

Updates on Bitcoin and Ethereum

Bitcoin

Both Bitcoin and Ethereum posted gains over the past week, amid strong buying in China and Japan, according to several media outlets. Investors once again picked up an appetite for both digital currencies following the drawdown after the huge run up recently.

In fact, the price of Bitcoin shot past the past all-time high of $2,900 on several exchanges before it fell back again. Several observers came out to say Bitcoin is in a short-term bubble, including Mark Cuban, investor and owner of the Dallas Mavericks NBA franchise.

Bitcoin: 7-Day Chart

Ethereum

The Ethereum community is once again buzzing about the upcoming move to the next release: Metropolis. Frontier was the initial release of the Ethereum network pushed live in July 2015. It was a bare bones release, with plans to increase the level of technology going forward. The Ethereum releases include Frontier, Homestead (where we are now), Metropolis and Serenity.

Some people are growing concerned the upcoming Metropolis hard fork could result in yet another Ethereum currency being created. Currently, we have Ethereum as well as Ethereum Classic—the original chain before the DAO debacle transpired. While that is certainly possible on paper, it seems highly unlikely in reality according to Ethereum experts. Time will tell as we move closer to the next software release.

Ethereum: 7-Day Chart

Breakdown of Alt-Coin News

Steem and Factom were two of the top performing coins this past week

Steem is “Social Networking with Rewards” according to their website. The system is an aggregate social networking site where users, or “Steemians”, post original content, links from the Internet and questions. Steem users upvote or downvote content to promote interesting post and reward the author.

The Steem token is based on a very complicated system where funds are tied up for a certain length of time after you attain or purchase them. Several critiques have been made regarding this system and many, if not most of them, have been negative. The volatility of the token comes from the fact that value is locked up and then released all at once for certain users. The reality is if you can’t understand the underlying technology–you probably shouldn’t be speculating or owning the token or currency.

Factom is an entirely different animal altogether. The Factom platform stores the world’s data on a decentralized system. It uses the Factom token, as well as writing back to the Bitcoin blockchain—the first company to use such a hybrid system.

According to the company, “The technology is able to solve real-world business problems by providing an unalterable record-keeping system, according to their marketing material. By creating a data layer on top of the Bitcoin blockchain, Factom’s distributed ledger technology secures millions of real-time records in the blockchain with a single hash using cryptographic isolation. “

It’s clear certain customers like businesses and governments could benefit from using Factom to document their information so that it cannot be modified, deleted or backdated. One of the issues is the struggle to gain high profile clients after a series of small test-runs over the past few years. Still, investors are betting that the company and technology are still in early stages and the broad community hasn’t discovered it yet.

Major Upcoming ICOs

The most exciting and anticipated upcoming ICO comes from Civic, which opens on June 21st to investors. In anticipation of the event, the company released a white paper on the token that is available online here: https://tokensale.civic.com/whitepaper.

Civic is an identity verification company that provides protection tools for both businesses and individuals. The company ultimately gives power to control to consumers in order to protect their identities through blockchain technology.

The company was founded by Vinny Lingham, a proven founder who recently sold Gyft, his previous startup, to First Data. Gyft is a digital gift card company with deep roots in the payments space. During his time there, Gyft was one of the first mainstream companies to deploy Bitcoin as a payment system to buy goods here in the U.S.—even though it was gift cards to merchants like Starbucks, Target, Nike, and many more.

Lingham recently took to Medium to blog (https://vinnylingham.com/the-vanity-headline-is-not-the-goal-introducing-the-civic-token-sale-3675b883fb05) about his intentions with the ICO and why the startup is going down this particular route. In it, he was critical other ICOs that raised a large amount of money from a small amount of people, just to grab headlines.

He said in the post, “What makes Civic different is that we believe in delivering the truth, transparency and always doing what’s right —we believe our values shouldn’t be relative. We have a strong sense of purpose, with our ultimate goal and mission being to change the world by creating a platform for democracy — with creating digital identities being just the very beginning of a long journey for us. When we decided to embark on doing a token sale, we decided to take the road less traveled and do what we believed would be a fair and inclusive token sale that would leave everyone feeling included.”

Of all the recent ICOs, this one stands out as being a very interesting one for various reasons. Strong management team, reputable investors, as well as a big need for the service–all stand out. Investors can enter their email address at the Civic website to get more information on the sale here: https://tokensale.civic.com/.

Other Relevant News to Cryptocurrency Investors

Security and Fee Notices to Customers of Kraken and Coinbase

Kraken made an announcement they will charge almost $7 for Bitcoin withdrawals out of their exchange. The move comes on the heels of rising transaction fees, which is an issue that’s still being hotly debated in the community.

Next, Coinbase told users to secure their accounts with Two-Factor Authentication, a type of security measure where you receive a code to input along with your password. Specifically, Coinbase wants users to use Google Authenticator for 2FA, not the Authy App, which was originally recommended. There was reportedly a recent breach at Authy, a security company owned by public company Twillo. It’s clear Bitcoin users should stay up on all news releases regarding breaches and software bugs to keep their wallets safe no matter which provider they use.

Jim Cramer Predicts Bitcoin Will Reach $1 Million Price on CNBC

His reasoning was flawed, but his forecast might not be as wild as it seems. Of course, it is increased investment demand, adoption, transactions and real world usage that is driving the price higher, not European banks.

CNBC reports Cramer says it’s possible bitcoin could reach $1 million one day. The price of digital currency stockpiled by companies to pay off potential cyberthreats could reach $1 million one day, CNBC’s Jim Cramer said Wednesday. Cramer was responding to a recent comment by Business Insider CEO Henry Blodget, who said bitcoin could go to $1 million.

“I think it could because the European banks are frantically trying to buy them so they can pay off ransomware. It’s a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys,” Cramer said on “Squawk on the Street.”

BitGo Software Engineer Jameson Lopp revealed that if the seven-year trend of Bitcoin price continues, Bitcoin will be valued at around $250,000 by 2020.

Lopp calculated the seven-year trend of Bitcoin price based on daily value change. With the exception of 2014, which was affected by the downfall of now-defunct Mt. Gox, Bitcoin has continuously recorded positive daily value change since 2010.

If you bought $5 in Bitcoin 7 years ago, you would have $4.4 million today. Not many investments offer this level of returns. It a generational opportunity to build wealth. While bitcoin and altcoin are considered high risk/high reward investments, I view the reward potential as much higher than the downside risk. Sure, bitcoin or ethereum could go to zero and lose 100%, although I view such a scenario as highly unlikely. To the upside, these coins have already gone up by many multiples and could continue to do so for quite some time. So, 100% downside risk vs 1,000% or 10,000% upside potential seems like a decent proposition to risk tolerant, diversified investors.

Top 10 Cryptocurrencies

We have added our top ten cryptocurrency picks to the GSB model portfolio this year. Those picks have helped to propel the portfolio to a gain in excess of 130% year to date in 2017. Our top position is up over 2,000% this year alone! We provide research into cryptocurrencies, technical charts, a list of recommended ICOs (initial coin offerings) and our Guide to Investing in Cryptocurrencies, to help you get started. Click the button to become a premium member and gain instant access.

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Jason is the founder of goldstockbull.com. He previously worked in data analytics for the world's largest research firm, consulting to Fortune 500 companies globally. Jason eventually leveraged those skills to trade successfully full-time and after helping friends and family optimize their investments, he launched Gold Stock Bull and The GSB Contrarian Report newsletter. Jason is a cycles investor with a contrarian eye for identifying undervalued assets. He has built an expertise in both the precious metals and cryptocurrency markets. Jason believes in honest money, limited government, decentralization of power and enjoys studying alternative economic models.

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